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Is Scale and Cost Inefficiency in the Swiss Bus Industry a Regulatory Problem? Evidence from a Frontier Cost Approach

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  • Massimo Filippini
  • Paola Prioni

Abstract

The aim of this study is to analyze the scale and cost inefficiencies in operation for the Swiss regional bus companies. For this purpose,we have considered estimation of a stochastic and a deterministic frontier cost model for a sample of 93 bus companies in 1989. The estimates of inefficiency from the frontier models are compared and discussed within the political and regulatory setting within which the Swiss regional bus companies operate. The empirical results indicate that regulation does not seem to influence the cost efficiency significantly. Only the tariff subsidies have a negative influence on efficiency. This is an interesting result because in the current transport policy debate, the abolition of this kind of subsidy has been raised.

Suggested Citation

  • Massimo Filippini & Paola Prioni, 1994. "Is Scale and Cost Inefficiency in the Swiss Bus Industry a Regulatory Problem? Evidence from a Frontier Cost Approach," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 1(2), pages 219-232.
  • Handle: RePEc:taf:ijecbs:v:1:y:1994:i:2:p:219-232
    DOI: 10.1080/758516796
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    References listed on IDEAS

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    1. Fuss, Melvyn & McFadden, Daniel (ed.), 1978. "Production Economics: A Dual Approach to Theory and Applications," Elsevier Monographs, Elsevier, edition 1, number 9780444850133, August.
    2. Fuss, Melvyn & McFadden, Daniel, 1978. "Production Economics: A Dual Approach to Theory and Applications (I): The Theory of Production," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, volume 1, number fuss1978.
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    Citations

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    Cited by:

    1. Massimo Filippini & Paola Prioni, 2003. "The influence of ownership on the cost of bus service provision in Switzerland - an empirical illustration," Applied Economics, Taylor & Francis Journals, vol. 35(6), pages 683-690.
    2. Mehdi Farsi & Massimo Filippini & Michael Kuenzle, 2006. "Cost Efficiency in Regional Bus Companies: An Application of Alternative Stochastic Frontier Models," Journal of Transport Economics and Policy, University of Bath, vol. 40(1), pages 95-118, January.
    3. Mehdi Farsi & Aurelio Fetz & Massimo Filippini, 2007. "Economies of Scale and Scope in Local Public Transportation," Journal of Transport Economics and Policy, University of Bath, vol. 41(3), pages 345-361, September.
    4. Simona Bigerna & Paolo Polinori, 2010. "Ambiente operativo ed efficienza nel settore del trasporto pubblico locale in Italia," SCIENZE REGIONALI, FrancoAngeli Editore, vol. 2010(3), pages 85-118.
    5. Carlo Cambini & Massimiliano Piacenza & Davide Vannoni, 2007. "Restructuring Public Transit Systems: Evidence on Cost Properties from Medium and Large-Sized Companies," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 31(3), pages 183-203, November.
    6. Cullinane, Kevin & Wang, Teng-Fei & Song, Dong-Wook & Ji, Ping, 2006. "The technical efficiency of container ports: Comparing data envelopment analysis and stochastic frontier analysis," Transportation Research Part A: Policy and Practice, Elsevier, vol. 40(4), pages 354-374, May.
    7. Alessandro Avenali & Andrea Boitani & Giuseppe Catalano & Tiziana D'Alfonso & Giorgio Matteucci, 2014. "Un modello per la determinazione del costo standard nei servizi di trasporto pubblico locale su autobus in Italia°," ECONOMIA E POLITICA INDUSTRIALE, FrancoAngeli Editore, vol. 2014(4), pages 181-213.
    8. Vigren, Andreas, 2014. "Costs for Swedish public transport authorities in tendered bus contracts," Working papers in Transport Economics 2014:22, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
    9. D. Fabbri, 1996. "La Stima di Frontiere di Costo nel Trasporto Pubblico Locale: una Rassegna e un'Applicazione," Working Papers 270, Dipartimento Scienze Economiche, Universita' di Bologna.
    10. Cinzia Daraio & Marco Diana & Flavia Di Costa & Claudio Leporelli & Giorgio Matteucci & Alberto Nastasi, 2014. "Efficiency and effectiveness in the urban public transport sector: a critical review with directions for future research," DIAG Technical Reports 2014-14, Department of Computer, Control and Management Engineering, Universita' degli Studi di Roma "La Sapienza".
    11. Filippini, M. & Koller, M. & Masiero, G., 2015. "Competitive tendering versus performance-based negotiation in Swiss public transport," Transportation Research Part A: Policy and Practice, Elsevier, vol. 82(C), pages 158-168.
    12. Ayadi, Ahmed & Hammami, Sami, 2015. "An analysis of the performance of public bus transport in Tunisian cities," Transportation Research Part A: Policy and Practice, Elsevier, vol. 75(C), pages 51-60.
    13. Avenali, Alessandro & Boitani, Andrea & Catalano, Giuseppe & D’Alfonso, Tiziana & Matteucci, Giorgio, 2016. "Assessing standard costs in local public bus transport: Evidence from Italy," Transport Policy, Elsevier, vol. 52(C), pages 164-174.
    14. Filippini, Massimo & Hrovatin, Nevenka & Zoric, Jelena, 2004. "Efficiency and regulation of the Slovenian electricity distribution companies," Energy Policy, Elsevier, vol. 32(3), pages 335-344, February.
    15. Massimo Filippini & Jörg Wild & Michael Kuenzle, 2001. "Scale and cost efficiency in the Swiss electricity distribution industry: evidence from a frontier cost approach," CEPE Working paper series 01-08, CEPE Center for Energy Policy and Economics, ETH Zurich.
    16. repec:eee:transa:v:108:y:2018:i:c:p:1-11 is not listed on IDEAS

    More about this item

    Keywords

    Bus industry; Efficiency; Regulation; Cost frontier; JEL classifications: L320; R480; L920;

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